21 hours Ago By Michael Golson
MERCEDES-Benz’s CEO has warned the famous car brand’s customers that the industry is facing uncertainty – but they’ll do all they can to keep prices down.The German manufacturer, who recently hit back at President Trump and the looming fines automakers are facing in the coming months, announced further cost-cutting and more petrol and diesel cars in its new product range.AFPMercedes-Benz’s CEO says the car industry is facing uncertainty[/caption]AFPThis comes as the brand is set to renew its focus on combustion-engined cars, after their EV sales collapsed in 2024[/caption]This comes as they’re hoping to revive their margins with a sharp drop in earnings expected in 2025.
Mercedes is poised to release 19 new combustion engine models and 17 battery-electric cars by the end of 2027.This represents a change of gear, seeing them renew their focus on combustion engine offerings, with their EV sales collapsing last year.According to a report by Reuters, most new Merc models will be in its top-end price tier – which shows that they’re still holding onto their strategy of selling a lower volume of higher-margin vehicles.
CFO Harald Wilhelm added: “The strategy of value over volume remains in place – it has not been abandoned.”They will also localize more production in China and the US – thus protecting themselves from rising trade tensions.These include threats from President Donald Trump of a 25% tariff on all vehicle imports from April.
At the unveiling of the brand’s future plans for growth, CEO Ola Källenius hinted at a plan to strengthen the company’s resilience.He said: “Mercedes-Benz Group delivered solid results in a very challenging environment thanks to a range of outstanding products and strict cost discipline.”“To ensure the company’s future competitiveness in an increasingly uncertain world, we are taking steps to make the company leaner, faster and stronger, while readying an intense product launch campaign for multiple new vehicles starting with the all-new CLA.
” However, a 30% slump in earnings in 2024 and 40% in its cars division may see even worse returns this year.Indeed, Europe‘s auto industry as a whole faces fresh challenges in 2025.Mercedes’ German rivals Volkswagen, other carmakers and even component makers have announced deep cuts, as executives warn that the region’s energy and labour costs have become uncompetitive.
By 2027, Mercedes plans to reduce production costs by 10%, and then double that by 2030.While they won’t shut down plants in Germany, they will shift production of one of its models from its home market to its plant in Hungary.Finance and human resources will be outsourced to procurement, and the size of their workforce will be reduced by not replacing workers who retire, as well as negotiating voluntary redundancies.
This comes as leaders of a number of auto brands issued responses to the recent talk of tariffs.At an investor conference on Wednesday, General Motors CFO Paul Jacobson said: “If they become permanent, then there’s a whole bunch of different things that you have to think about in terms of, where do you allocate plants, and do you move plants, etc.“Those are questions that just don’t have an answer today, because I can tell you, as much as the market is pricing in a big impact of tariffs and lost profitability, think about a world where, on top of that, we’re spending billions of capital, and then it ends.
”GM CEO Mary Barra echoed his comments, stating several weeks ago: “There’s no question that tariffs at 25% from Canada, Mexico, if they’re protracted, would have a huge impact on our industry, with billions of dollars of industry profits wiped out and adverse effect on the US jobs as well as the entire value system in our industry.”Ford CEO Jim Farley, speaking earlier this month, also warned: “Tariffs would also mean higher prices for customers.”Drivers are worried about what the future holds too.
Taking to social media site X, one user wrote: “Auto sector will be absolutely crushed if tariffs are implemented.“A lot of auto part factories are in Canada and Mexico, and if there aren’t any parts, shutdowns occur, and costs go up; just ask Ford.”What to do if a dealership closesIf you recently bought a car or motorcycle from a dealership that suddently closed, you may feel anxious about how that affects you.
When you finance a new car or motorcycle or need warranty repairs done at an authorized dealership, a sudden closure can make some people think they’re out of options or worry their car will be repossessed. If you’re in a situation that sounds like that, here are a few things you can do after receiving an official notice: Notify the bank hosting your loan of the closure to make them aware. If the financing is done through the dealership itself, it’s important to contact the dealership or your salesperson to ask how to keep up your payments.
Many dealerships will send the lien (the title and registration that will only be released to the buyer after the debt is paid) to a financial institution to keep. If the dealership cannot be contacted through traditional means, most states allow drivers to apply for the title and registration through the DMV. If you leased a car from a dealership that went out of business, instructions should be sent as to which dealership to bring your vehicle to when the lease expires.
If not, contact the dealership. A factory warranty through the manufacturer will be honored at any other authorized dealership. However, an extended warranty through the dealership may not be honored at other repair shops, so it’s important to seek that information from the dealership as soon as possible.
Source: Consumer Law Group.
